Struggles in Japan’s Housing Market Continued in February and March

Japan’s housing market continues to fight an uphill battle, despite some signs of improvement. In February, Japan’s housing starts declined -3.7%, followed by a slight improvement in March of 1.5% to 35,448 units. By wooden housing type, post and beam starts are outperforming wooden prefab and 2×4 construction. Rental housing narrowed its decline to -0.4% in February and posted growth of 2.6% in March — the first monthly gain in 31 months. While likely somewhat overly optimistic, it is interesting to note that MLIT increased their seasonally adjusted annual housing starts forecast to 880,000 units for fiscal 2021. The total number of non-residential starts between January and March 2021 fell -8% to 10,205 units; however, non-residential floor area increased 6.5% to 8.75 million square meters. Wooden non-residential starts dipped -1.8%; however, floor area increased 5.4% to 722,057 square meters. The top five building types for wood use in Japan were led by medical, elderly care and social welfare facilities, mixed residential/commercial, agricultural, business services and the restaurant & hospitality sector.